American Tubing International, a private manufacturing facility in Springdale since 1976, has grown its employment to roughly 400. This week the company was acquired by Sanhua Holding Group of China, and executives said they see opportunity for future growth.
Financial terms were not disclosed and they also declined to say if or when there could be an expansion in Springdale. Yabo Zhang, president of Sanhua Holding Group, was in Springdale on Thursday (July 19) to announce the deal. Through an interpreter he told Talk Business & Politics the two companies were introduced through mutual customers.
He said Sanhua makes valves and components used in commercial and residential air conditioning units. Zhang said American Tubing fabricates copper tubing also used in air conditioning and refrigeration. He said common customers for the two include Carrier, Lennox, Rheem and many others.
Zhang said Sanhua also owns eight facilities in China that do similar work to that of American Tubing and the company will be able to share best practices, research expertise and capital as the company is looking grow its North American footprint.
Chuck Lewis, president of American Tubing, said it makes sense that components made specifically for use in North America be manufactured in the U.S. given the rising cost of transports and long supply chain from China.
“It makes even more sense to make them here now that new tariffs are in place,” Lewis added.
Last week the U.S. government released a 195-page list of Chinese exports worth $200 billion that face a 10% tariff. On this list are components used in air conditioning and refrigeration. Sanhua Holding also supplies the auto industry with air-conditioning components as well as commercial and residential real estate. Having access to tubing in the U.S. is one way the company can keep costs down for its U.S. customers.
This is the second U.S. acquisition of Sanhua Holding. The company acquired R-Squared Puckett in Jackson, Miss., that makes aluminum heat exchanger components for the auto industry and residential and commercial air-conditioning markets.
Zhang said about 300 people work in the Jackson plant and the Springdale acquisition gives the company roughly 700 employees in the U.S. Since 2013, R-Squared has expanded its footprint with a $2 million corporate investment, adding 50 new jobs. American Tubing expanded in 2013 with a $3.2 million investment that gave the company an additional 20,000 square feet. The company said it added 50 jobs at that time.
Springdale Mayor Doug Sprouse said the acquisition should give the company additional capital to grow the business as demand dictates. Sprouse said the city continues to work on street improvements in the industrial district where American Tubing is located on Turnbow Avenue.
“We plan to expand the intersection at Ford Avenue off of Highway 265 with a new left turn lane which is sorely needed. We will also extend Turnbow out to Butterfield Coach Road which will give trucks and traffic a second entrance and exit to the industrial park,” Sprouse said.
Zhang said his stay in Springdale will be short but he will send a financial team from China to work in the local operation. He said he was happy to visit the Walmart Museum on the square in Bentonville on Wednesday evening and wants the local public to know Sanhua’s culture is close to that of Walmart, a company that sees its people as its greatest asset.
Lewis said while American Tubing has had several owners over the years, he sees the deal as the best move yet because it will expose the company to new categories that could help grow the local operation.
“While we share many common customers, taking our products and marrying them with theirs we will be able to give the market products they have not yet seen,” Lewis said. “If you looked inside an air-conditioning unit all the tubing that carries refrigerant to and from the unit is made by us. The valves that control the movement of the refrigerant comes from Sanhau.”